Colorado may eventually roll out its own programs to aid struggling businesses in the state, but it first wants residents to claim as many of the trillions in federal stimulus dollars as they can.
“What we are focused on is getting as much federal dollars as we can and number two, identifying those gaps,” said Betsy Markey, executive director of the Colorado Office of Economic Development and International Trade, on a conference call Thursday.
There’s a sense that Colorado didn’t get its fair share of the stimulus during the last recession, and the governor’s Growth and Economic Stabilization Council, of which Markey is a member, wants to make sure that doesn’t happen again, she said.
There are 15 Small Business Development Centers located throughout the state and hundreds of technical consultants who can help people struggling with the alphabet soup of federal programs that have rolled out the past three weeks, Markey said. COEDIT also operates a hotline at 303-806-5881 for those needing immediate assistance.
On Friday, the Paycheck Protection Program will open up lending to independent contractors, gig workers, and the self-employed. The program has seen such strong demand from small businesses that the $349 billion initially allocated looks like it could run out soon. Plans are to boost that by another $250 billion.
“Everyone should be contacting their bank today,” Markey said. “If you are having a problem with your bank, I recommend you find another lending institution. Be persistent.”
The landing page at COEDIT’s website Choosecolorado.com has resources on applying for assistance, including a search engine of banks and lenders participating in the federal loan programs.
On Thursday, the Federal Reserve unveiled two additional lending facilities to help medium-sized and large firms not covered under earlier loan programs through the U.S. Small Business Administration.
Any business which has significant U.S. operations, has a majority of employees based in the country, and is incorporated in the U.S., is eligible to borrow under either program so long as it has no more than 10,000 employees and did not earn more than $2.5 billion in revenues in 2019, said Tim Crisp, Holland & Hart Commercial Finance Partner.
Under the Main Street New Loan Facility (MSNLF), businesses can borrow between $1 million and $25 million, while the Main Street Expanded Loan Facility (MSELF) allows for loans of up to $150 million in some cases.
“Companies with over 10,000 employees, or whose 2019 revenues exceeded $2.5 billion, would not be eligible to borrow under these programs. It is unclear whether small businesses with 500 or fewer employees will be eligible to apply for these loans,” Crisp added.
Unlike the Payroll Protection Program available to small businesses, the initial expectation is that the Main Street loans won’t be forgiven. And borrowers must retain or rehire 90% of their workers as of Sept. 30.
“Until the Fed issues rules or additional guidance, it’s not clear whether a company who tries but fails to retain and rehire to those levels will face consequences, or what those consequences may be,” Crisp said.
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